LightSquared Expected to Retain Control of Spectrum Licenses, Even if Bankrupt, Satellite Experts Say
While LightSquared’s investor considers a bankruptcy filing and awaits a ruling on the FCC’s proposal to revoke its ancillary terrestrial component (ATC) authority, the company’s control of its spectrum license is expected to remain intact, some satellite executives and analysts said. Phil Falcone, Harbinger Capital Partners CEO, said last week that he’s considering bankruptcy as an option for the company that is attempting to integrate a ground-based wireless network with satellite coverage (CD April 6 p14).
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The FCC cannot confiscate the company’s spectrum, but LightSquared would need approval from the commission if it wanted to sell its licenses, some satellite professionals said. Selling the licenses would be the company’s decision, “as opposed to the company having to be at the mercy of the FCC just taking its licenses,” said analyst Jeff Silva of Medley Global Advisors.
The commission doesn’t take away a bankrupt company’s license, but the concern is likely “what can they do with their spectrum,” said a satellite industry executive. If LightSquared files for Chapter 11 bankruptcy protection from its creditors, then the commission’s decision on the proposal could be informed by the bankrupt status, he said. “The FCC takes into account the health of companies.” It wants to help companies that they think can succeed, he added.
Transferring licenses could keep the company in bankruptcy longer, said analyst Tim Farrar of TMF Associates. “There needs to be an approval from the FCC to transfer that,” he said. “Until you have a resolution it’s not clear that you would exit from bankruptcy."
Comments were due last month on the FCC public notice, which included a proposal to rescind LightSquared’s waiver of FCC rules to offer terrestrial services in the L-band (CD April 2 p18). The International Bureau received many filings in response to its Feb. 15 public notice on GPS interference issues, an FCC spokesman said. Staff is reviewing the record. LightSquared’s position of record is that they intend to go forward with their planned LTE service, he added.
LightSquared appears to have limited options “with respect to mobile satellite licenses it continues to hold,” Silva said. Some options include swapping spectrum, proposing a new band plan or “litigating to have the conditional terrestrial waiver reinstated and selling some or all of its spectrum assets,” he said. “The bottom line is the company is squarely behind the eight-ball.” LightSquared declined comment.